Brian Gaynor 's Opinion

Investment columnist for the NZ Herald

Brian Gaynor: Accept that Auckland will grow and plan to adapt

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UN predicts that 67% of the world's population will be urbanised by 2050

There is a clear need for more public transport and better roads in Auckland and we all have to contribute. Photo / Brett Phibbs
There is a clear need for more public transport and better roads in Auckland and we all have to contribute. Photo / Brett Phibbs

Auckland is at a major crossroads. We can either accept that the city will grow dramatically over the next few decades and plan accordingly or we can do nothing and allow Auckland to become more and more congested and less attractive to live in.

The early signs are that we will take the do-nothing approach as community groups oppose developments that will have a positive impact on the city as a whole. This is unfortunate because international trends clearly indicate that Auckland will experience strong growth even if we don't develop the facilities to cope with this growth.

Urbanisation is a worldwide trend with the United Nations predicting that 67.2 per cent of the world's population will be urbanised by 2050 compared with 51.6 per cent at present and just 29.4 per cent in1950.

Urbanisation is even more important in economic terms as cities generate an estimated 80 per cent of world GDP even though they represent just 52 per cent of the total population.

New Zealand is one of the world's most urbanised countries - with 86.2 per cent domiciled in our urban areas - yet Auckland will still experience strong growth in the decades ahead.

Cities continue to expand even though the general consensus 20 to 30 years ago was that they would stop growing because technology would allow people to work from the beach, skifields or a remote office.

These predictions were totally wrong for a number of reasons.

The first is that our work and social lives have become intertwined.

In the past we went straight home after work, particularly if it was a manual or blue-collar job.

We rarely worked from home or at weekends. Now we go to work and have coffee with friends at 10am, go to the gym at lunchtime and stay in the city for a drink or meal after work. We shop, either real or online, at lunchtime and email and text our friends and families.

The demarcation between work and non-work has become blurred, particularly as we can work from home if we have access to the office through cloud computing.

Cities offer a mix of coffee shops, bars, restaurants, theatres, gyms, sports stadiums, medical facilities, parks and shops that encourages us to work in the city rather than in isolation at home.

In the modern world we are able to mix and match our work and social life and our dress style, which is increasingly similar for both work and social occasions, reflects this.

As far as facilities are concerned, Auckland missed a great opportunity to develop its downtown facilities when it rejected an offer by the Government to fund a waterfront stadium for the 2011 Rugby World Cup.

Many of the more progressive cities have moved their sports stadiums from the suburbs to the downtown area to provide a wider variety of commercial and social facilities for citizens and visitors.

For example the other night the San Francisco Giants played the Arizona Diamondbacks in San Francisco's new downtown baseball stadium in a game that was partly sponsored by Air New Zealand. It is highly unlikely that our national carrier would have sponsored this if the Giants still played at the club's old windswept suburban ground.

Far more international artists perform at the downtown Vector Arena than the ASB Showgrounds' Logan Campbell Centre or Waitakere's Trusts Stadium and one of Melbourne's attractions is that it has a large number of sports stadiums, art galleries, theatres and other entertainment facilities within walking distance of the city centre.

Cities, particularly inner cities, are also growing rapidly because of changing social trends including fewer marriages, more divorces, childless couples and same-sex relationships.

In addition, many of the new immigrants, particularly from Asia, want to live in inner-city apartments rather than the more traditional suburban home. A first-rate modern city requires a number of important features, including an efficient transport system, walkability, safety and attractive commercial and social facilities.

Transport is a major issue in Auckland and we spend most of our time arguing whether the city should provide more public transport or more roads and who should pay for these.

There is a clear need for more public transport and better roads and we all have to contribute, even those living in the inner city who don't use transport.

It is vitally important that there is full connectivity between trains, buses, taxis, roads, and cycling and walking facilities. There is no point in having a train, road, cycling or bus system that ends in a part of the city with no connectivity with other transport facilities.

The next and most important feature is the ability to walk from one facility to another. Walkability is one of the most important features of modern urban planning.

Hong Kong has a network of elevated walkways that connect one city block with another and Singapore has a network of underground connections allowing pedestrians to walk between hotels, residential facilities, social meeting places, work and important urban landscapes.

One survey ranks Zurich, Amsterdam, Singapore, Munich and Hong Kong as the best cities in terms of walkability. Melbourne also has excellent walkability in addition to its trams and urban rail system.

Another big issue in Auckland is the role of organic evolution versus intelligent planning, particularly as far as apartments are concerned.

We have adopted the organic evolution approach and the inner city is cluttered with cheap, unattractive shoe-box apartments. Inner-city apartments are a major feature of modern cities and we should accept this fact and plan for world-class high-rise apartments with open space between them.

Many cities, including Vancouver, have been revitalised by encouraging high quality 30-floor-plus apartments with parks and recreational space between them. The city's outdoor football stadium and indoor ice hockey stadium are also in the downtown area.

Greater Auckland, which is the world's 307th largest city, had a population of 1,460,000 in 2010.

Greater Tokyo is the world's largest city with a population of 36.9 million, followed by Delhi with 21.9 million and Mexico with 20.1 million.

Auckland now accounts for 33.4 per cent of New Zealand's population compared with just 16.7 per cent in 1950. In the past 60 years Auckland has contributed 46 per cent of the country's population growth.

The city is projected to have a population of 1,844,000 by 2025 when it will contain 36.8 per cent of the country's total population. The 2025 projection for Auckland may be on the light side as Statistics NZ believes that Auckland's population could exceed 1,950,000 by the mid-2020s and 2,100,000 by 2031.

A population of 2,100,000 by 2031 would represent growth of over 50 per cent since 2010. We shouldn't be surprised by this as Auckland's population surged by 68 per cent between 1990 and 2010 while New Zealand's overall population increased by 31 per cent over the same period.

One of the main road blocks towards planning for the future is the unwillingness of a large percentage of Aucklanders to accept that their city will continue to grow and the need for more and more infrastructure to cater for this growth.

Submissions to the city council, and letters to the editor, continue to promote policies that would stop people from moving to Auckland or encourage Aucklanders to move to Otago or Southland.

This is naive because Auckland is a very liveable city and the earnings gap between the country's largest city and the South Island continues to increase.

For example, Auckland's median income is now $126 a week higher than Otago and $163 a week greater than Southland compared with $76 and $115 respectively in 2005.

We have to accept that Auckland will continue to experience strong population growth, as will most major urban centres, and the city will be less liveable unless we plan carefully for this growth.


Brian Gaynor is an executive director of Milford Asset Management.

- NZ Herald

Brian Gaynor

Investment columnist for the NZ Herald

Brian Gaynor has written a weekly investment column for the Weekend Herald since April 1997. He has a particular passion for the NZX and its regulation. He has experienced - and suffered through - the non-regulated period prior to the establishment of the Securities Commission in 1978 and the Commission’s weak stewardship until it was replaced by the FMA in 2011. He is also a Portfolio Manager at Milford Asset Management.

Read more by Brian Gaynor

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